Parliament passed the law late on Monday.
The new law comes on top of legislation passed in February that made it easier for the authorities to block access to web pages without a prior court order, prompting public anger and raising concern about freedom of speech.
The new law expands those powers, allowing the TIB telecoms authority - headed by a former intelligence official - to block sites if deemed necessary for matters of "national security, the restoration of public order and the prevention of crimes".
The February law limited these powers to cases of privacy violations and was only passed after former President Abdullah Gul requested amendments watering down some of the clauses.
The main opposition CHP said it would appeal to the constitutional court to try to overturn the new law, passed only weeks after a new government took office in the wake of Erdogan's election last month as president.
The February legislation was seen by critics of Erdogan, then prime minister, as an authoritarian response to a corruption inquiry shaking his government and as a bid to stop leaks circulating online.
Turkey, which hosted the international Internet Governance Forum only days ago, temporarily blocked access to Twitter in March, after recordings allegedly portraying Erdogan and his inner circle's links to the corruption scandal. The move triggered public uproar and drew international criticism.
Erdogan cast the scandal as a plot orchestrated by his ally-turned-foe, US-based Islamic cleric Fethullah Gulen, whose followers wield influence in the police and judiciary. REUTERS